U.S. Stocks Poised for Market Shift: Focus on Economic Data and Policy Developments

Investors are set to shift focus from geopolitical events to U.S. economic data and policy developments. The S&P 500 and Nasdaq reached new highs amid optimism about rate cuts and trade deals. Upcoming economic reports, potential changes in interest rates, and the fiscal bill are expected to influence market movements.

This week, investors who were previously focused on geopolitical issues are turning their attention to U.S. economic data and policy developments, as they assess the potential extension of a recent stock rally. The benchmark S&P 500 and Nasdaq Composite reached record highs, driven by optimism surrounding interest-rate cuts and trade negotiations.

The anticipation of President Donald Trump's tax-cut and spending bill, alongside the release of the monthly employment report, is expected to impact investor sentiment. U.S. employment numbers are projected to reflect a June increase, though at a slower pace than in May, amid concerns over economic growth and job market stability.

As the Federal Reserve contemplates its next move, investors will closely monitor inflation levels and tariff developments. With trading indications suggesting potential rate cuts this year, the U.S. Treasury's ongoing trade negotiations could further influence market volatility, while corporate earnings and fiscal policies remain pivotal.

(With inputs from agencies.)